Industrial Influencers, State of U.S. Manufacturing, Threats to Supply Chains

Welcome to another edition of the Industrial Innovation Advocate, where we talk about the technologies that advance manufacturing, supply chains, energy, and other areas of the industrial economy, and how brands in this space can thrive and grow. This Friday we are discussing approaching analyst relations in industrial tech, the role of industrial tech in turning around U.S. manufacturing, and whether we're taking our eye off the supply chain ball.

Understanding Analyst Relations for Industrial Tech

In enterprise IT, analyst relations is a make-or-break part of product marketing for most vendors. Firms like Gartner and Forrester wield tremendous influence with senior IT leaders in particular in setting IT priorities and recommending vendors to help meet them. As a result, vendors expend a lot of effort (and money) in working with these analysts to try to ensure they are positioned accurately and positively and to try to shape what issues are seen as important.

What about in industrial tech categories? How many of these are true for you?

• IT is an important audience.
• The solution is software.
• Generational AI is involved or will be.
• The solution is relatively expensive.
• The category is changing and relatively immature.
• The customer size is midmarket to large enterprise.

The more of these are true, the more important it will be for analysts to understand your offering and how it aligns with how they see the world, what customers are saying about it, and where you are planning to take it in the future so they can recommend you to prospects.

For many other companies in the industrial tech category, it's still an important effort but on a smaller scale. It's about establishing credibility as a key player, gaining a reinforcing analyst echo for the functionality or issues you think are important, and helping people understand what types of customers need what you offer. Industry-specific firms are especially important. Think ABI Research and ARC Advisory Group in manufacturing generally. ABI had a whole team at IMTS. ARC holds Industry Leadership Forums around the world attended by manufacturing business leaders - the next one is in February on industrial AI. Segments like additive manufacturing have their own firms like CONTEXT and Additive Manufacturing Research .

And what does it takes to be successful? Invest in the relationship. A briefing once a year isn't much of a relationship. You need to bring analysts inside your initiatives so they can give you advice that will be valuable to you and help them feel invested in your success. Chat regularly. Connect them with customers. Share NDA information if possible. Understand their POVs and talk about your solution accordingly. LIsten to feedback even (especially) when it's not positive. Attend their events. Leverage reprints for lead gen.

State of American Manufacturing: Hopeful?

Alex Huckstepp gave a useful update on the state of American manufacturing and supply chains recently at the Build Better Conference. Alex is a longtime advanced manufacturing GTM leader at companies like Carbon , Digital Alloys , ARRIS and Machina Labs and is currently an advisor at Omni Ventures . In his session, he observed the following:

• The U.S. continues to see manufacturing as a percentage of GDP decline - it's now just over 10%, which is lower than not only China, but also Japan, India, South Korea, and Germany.
• The decline is across basically every sector except food, beverage and chemicals. The U.S. has lost 45,000 companies since 2002, including about a quarter of the companies in the computer and electronics category. China is dominating in battery manufacturing.
• Meanwhile last year, China deployed 51% of the world's robots. The U.S. deployed 7%. Utilization of robotics is lagging even as the country has a skilled labor gap. The forecast is for over a million unfilled jobs in manufacturing by the end of the decade.
• Signs of hope: In 2022 the U.S. government passed the CHIPS and IRA acts and it's having a major impact on manufacturing construction. There are over 10 semiconductor builds in the U.S. right now with an investment value of at least $1 billion, including 美光科技 in Idaho, 德州仪器 in Utah, and EMP Shield INC in Kansas. This will take a while to turn into new chips, but it's a very positive development. We'll be able to get back to 14% by the end of the decade, which sounds small but that's a 40% improvement. And the U.S. is projected to go from 0% to 28% share of the smallest, most advanced chips.
• Meanwhile, despite the overall lag in industrial robotics, the U.S. is accelerating in humanoid projects. The U.S. has four out of the six leading projects. Manufacturing is the largest application focus for these humanoids, with initiatives underway from companies like Tesla , Figure , 帕西尼感知科技 , and Unitree Robotics among others.
• The U.S. does dominate software, and AI is truly going to revolutionize manufacturing. It's already having a big impact on predictive analytics, forecasting, and image recognition. Innovative startups will need to lead that, especially "software for hardware" startups, from CAM companies like Dyndrite , to platform companies like Tulip Interfaces , design software companies like nTop and engineering software companies like Algoryx .

So, AGAIN people, if we want healthy manufacturing, we need healthy technology adoption. A lot of the innovations will come from upstarts, but it's big manufacturers that will deploy them for major impact. Here's Alex's presentation:

Supply Chains STILL Vulnerable

So with the pandemic in the rearview mirror now, surely all must be well in supply chain land again, right?

麦肯锡 says, sadly, no. Reporting on the firm's Global Supply Chain Leader Survey 2024, problems remain the norm, not the exception. In fact, 9 out of 10 respondents said they have faced supply chain challenges this year.

Supply chains are in fact more resilient now than they used to be, with progress made on dual-sourcing strategies and regionalizing supply chains. Visibility into tier 1 suppliers has also improved and progress has been made on implementing advanced planning and scheduling systems.

Still, McKinsey says there are signs we are losing momentum in building supply chain resilience. Investments in supply chain digital transformation have leveled off, as have the number of respondents advancing some of those strategies like dual sourcing and regionalization.

Meanwhile, senior management focus on supply chains is dropping, as if the problem has been solved. Last year, half of respondents reported a regular cadence of such meetings. Now it's 25%.

A lot of board and executive attention is being give to AI strategy and that may be a way to keep focus on supply chain issues. There are lots of opportunities to deploy AI to improve supply chain resilience, from network modeling to inventory optimization. Between climate disruption, trade wars, and armed conflicts, we'll have plenty to focus on.